Trying to calm bank depositors' fears, RBI Governor Shaktikanta Das said that the central bank's actions are always in the legal framework of law and in the best interest of depositors.
Speaking at the event, NCAER Director General Shekhar Shah said the pandemic has driven digitalisation in a few months that would have otherwise required years.
Three banks, Lakshmi Vilas Bank, YES Bank, and Punjab and Maharashtra Co-operative (PMC) Bank, were placed under moratorium by Reserve Bank of India (RBI) in a little over last one year. The moratorium on Lakshmi Vilas Bank was withdrawn last week after the government sanctioned the scheme for the amalgamation of the bank with DBS Bank India Ltd. Similarly, YES Bank has also successfully been revived under the guidance of State Bank of India (SBI). On the other hand, the PMC resolution seems to be a far cry. Trying to calm bank depositors’ fears, RBI Governor Shaktikanta Das said that the central bank’s actions are always in the legal framework of law and in the best interest of depositors.
Das further added saying that preservation of financial stability and depositors’ interest is the ‘uppermost’ priority on the RBI’s agenda, and cited the rescues of Yes Bank and Lakshmi Vilas Bank as efforts in the same direction. Das iterated that all the actions taken by RBI in both banks were within the purview of the law. Das refused to comment further as both matters were sub judice.
RBI Governor Shaktikanta Das also said that the two banks in which they had to intervene and resolve, was not something that happened on one fine morning or they were not aware of what was happening. “Our first focus is to work with the management of the bank and resolve the problem and request them. Only when we see a need for regulatory intervention, only when we see that regulatory intervention is required, in the best interest of the depositors we intervene,” Das said.
Last month, the government on the advice of the RBI, imposed a 30-day moratorium on the Lakshmi Vilas Bank, restricting cash withdrawal at Rs 25,000 per depositor. The RBI had superseded the board of the bank and appointed T N Manoharan, former non-executive chairman of Canara Bank, as an administrator of the bank for 30 days.
RBI to improve digital payment channels’ security
Besides, in order to improve the security of digital payment channels and convenience for users, RBI Governor Shaktikanta Das on Friday said the central bank will be introducing digital payment security control directions for regulated entities. This announcement came a day after RBI imposed strictures on India’s largest private sector lender HDFC Bank after recent outages on internet banking and mobile banking. It also ordered the bank to stop all new digital business generating activities under its Digital 2.0 plan and issuance of new credit cards. Similarly, State Bank of India’s digital banking app also faced the service outages on Thursday.